How blockbuster failed strategically
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Blockbuster was once the dominant movie rental company with over 6000 stores and $8.4 billion in annual revenue, but failed to adapt to changes in customer demand and new technologies like online streaming from Netflix and Redbox kiosks. Blockbuster's competitive advantages of its large store network became a liability as it faced high operating costs, inflexible brick-and-mortar model, and failure to transition to digital and online services, leading the once-dominant company to file for bankruptcy.
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How blockbuster failed strategically
- 1. its story of failure
- 2. What is Blockbuster Movie rental 6000+ stores David Cook Dallas, NY $18.5 million $8.4 billion Net worth 8000 VHS tapes Overall experience $24 million Viacom
- 3. Failure to assess the needs of their customer 3 Absurd late fee system Shift in customer demand Redbox: Kiosks Netflix: Online streaming Word of Mouth, Inconvenience of the customers
- 4. Obsolescence of competitive advantage through technological changes 4 Refocusing on their brick and mortar system 3 Declined $50 million deal of Netflix to digitalized 2 Failure to renovate competitive advantage 1 High operating cost. 4
- 5. Failure to take proper business level strategy 5 Strategy to stop late fees and start online streaming Internal dispute with the CEO Rapid changes in competitive dynamics Disruptive technology
- 6. Recommendation External environment analysis Capitalizing on opportunities Technological adaption for digitalization